SINGAPORE- Singapore’s non-oil domestic exports in June fell 8.7 percent from the same month a year earlier, data showed on Wednesday, weighed down mainly by weakness in non-electronic products.
The decline compared with a Reuters poll forecast of a 1.2 percent drop, and followed a downwardly revised 0.7 percent contraction in May.
Maybank economist Chua Hak Bin said Singapore’s port congestion and the logjam from the Red Sea crisis may be dampening the export recovery since manufacturing and electronics sentiment suggest demand remains healthy.
“The disruption may persist for a few months, but may imply some pent-up demand and catching up in export volumes by late third quarter,” Chua said.
On a month-on-month seasonally adjusted basis, non-oil domestic exports decreased by 0.4 percent in June.
Enterprise Singapore’s seasonally adjusted data showed the value of non-oil exports at S$13.8 billion ($10.3 billion) in June, level with May and down from S$14.4 billion in June 2023.
The government said the decline was mainly due to non-electronic exports, “primarily, volatile products like non-monetary gold”.
Non-electronic products in June fell 8.7 percent from a year earlier.
Non-oil exports to Singapore’s top markets declined as a whole in June. The largest was the 41.9 percent annual contraction in exports to Hong Kong, after growth of 73.4 percent in May, due to lower shipments of non-monetary gold, integrated circuits and measuring instruments.
Singapore’s economy grew 2.7 percent year-on-year in the first quarter of 2024, the quickest pace in 18 months, data showed as the government said it expected manufacturing and trade-related sectors to improve over the course of 2024.
The growth matched a preliminary estimate released last month and was stronger than the 2.5 percent forecast by economists in a Reuters poll. It was the fastest pace since the economy grew 4.1 percent on a year-on-year basis in the third quarter of 2022.
Edward Robinson, deputy managing director of the economic policy group at the Monetary Authority of Singapore (MAS), said after the data that current monetary policy settings were appropriate.
“The prevailing rate of appreciation of the exchange policy band is needed to keep a restraining effect on imported inflation as well as domestic cost pressures,” he said at a media briefing.
“We had assessed it to be sufficient to ensure medium-term price stability in the economy.”
Separate data showed annual core inflation came in at 3.1 percent in April, matching the rate in March.
The core rate is expected to gradually moderate before a more discernable step down in the fourth quarter, the MAS and Trade Ministry said. Both core and headline inflation were expected to average between 2.5 percent and 3.5 percent this year. The central bank left monetary policy settings unchanged at a policy review in April.
OCBC economist Selena Ling said MAS policy will likely remain unchanged for rest of the year. “They are still awaiting the easing in core inflation in the fourth quarter,” she said.
